Oral tradition refers to the transmission of knowledge by means of word of mouth, as opposed to written records. In pre-literate societies, oral tradition was the only practical means of preserving knowledge.
Typically, knowledge would be preserved in the form of poetry. The reason for this is simple - poetry, or song, because of its regular and repeating structure, is much easier to memorise than prose. This is why ancient works such as the Odyssey take the form of poetry, since they are simply the written versions of the preceeding oral tradition. Today we think of poetry as rather ephemeral, and dealing with only certain subjects, but in pre-literate societies poetry, of necessity, was employed to record any information that needed preserving, from dry genealogical lists to practical scientific knowledge. Of course, stories and myths were also recorded in this way, and when writing first emerged in any given area, the poems and songs were written down exactly as they were recited, thus preserving them until the present day.